DIVIDING RETIREMENT ACCOUNTS
There are important differences associated with dividing retirement plans that are already in pay status and those that are not. Some people divorcing later in life are already retired, and thus are most likely already collecting from a retirement plan. This limits the options available for dividing some plans in divorce. Different plans have different options, so it is imperative to know the rules of the plan you are dealing with.
Pension plans, as opposed to 401(k) plans or 403(b) plans, once in pay status, pay a fixed sum of money each month for the rest of a participant’s life. The amount of the payment is typically based on the income the person earned over a period of time. The payment amount will also depend on whether there was a survivor beneficiary named at the time of retirement and the extent of the continued benefit.… Keep reading